Tajikistan is a small, landlocked country in Central Asia. It is bordered by Afghanistan, China, Kyrgyzstan and Uzbekistan. Despite its small size and population of 8.7 million people, Tajikistan’s economy has made impressive strides in recent years. The country’s GDP growth rate has been consistently high since 2000, reaching a peak of 8.3% in 2017.
The main economic drivers of Tajikistan are agriculture and remittances from abroad. Agriculture provides employment to over half the population and contributes approximately 25% to the total GDP of the country. Remittances have become increasingly important for Tajikistan as they account for up to one-third of the country’s GDP, mainly coming from Russia and other countries with a large Tajik diaspora.
According to cheeroutdoor, Tajikistan’s industrial sector is relatively small but growing steadily due to recent investments in infrastructure projects such as power plants and hydroelectric dams on the Amu Darya River. The government has also made efforts to attract foreign direct investment (FDI) by offering tax incentives and other benefits for businesses operating in the country.
Despite these positive developments, Tajikistan remains one of the poorest countries in Central Asia due to its low levels of human capital and weak financial sector development. The unemployment rate remains high at 15%, while poverty levels remain above 30%. In addition, corruption remains an issue as well as inadequate access to healthcare services and education opportunities for many citizens living outside urban areas.
Overall, while progress has been made in recent years to improve Tajikistan’s economy, there is still much work that needs to be done if it is to reach its full potential. The government must continue its efforts to attract FDI and promote private sector development while also investing more resources into social welfare programs that can help alleviate poverty levels across the country.
Tajikistan is the poorest of the states of former Soviet Central Asia. The basis of the country’s economy consists of cotton cultivation and the aluminum industry. In addition to these industries, transfers from Tajik residents living outside the country’s borders are also of great importance. According to COUNTRYAAH, Tajikistan has for many years been a transit country for drug trafficking, which has contributed to a large unofficial economy and widespread corruption.
Business life before independence was characterized by the central planning of the Soviet period. Governance and structure largely followed the Soviet Union as a whole, albeit with a larger agricultural sector and with significantly lower per capita production and income levels than the all-union average. The economic reforms initiated since independence mainly include the right to use agricultural land, new corporate forms and reduced state ownership in the business sector. The change in business and the civil war in 1992-97 brought great financial strain and a large proportion of the well-educated labor force disappeared from the country.
Although the country was hit hard by the international financial crisis, the economic situation improved during the 1990s. This is mainly due to increased international demand for aluminum and cotton. The country also has great potential for the extraction of water energy.
Only 7 percent of Tajikistan’s land is suitable for agriculture. Despite the limited agricultural area, agriculture employs about half of the country’s workforce. The majority of the arable land is found in the country’s southern and northwestern parts, while the country’s eastern parts are suitable for grazing land. Of a total of 850,000 ha of arable land, more than 700,000 ha are irrigated.
The most important crops are cotton, fruits, vegetables and cereals (mainly wheat). Potatoes and tobacco are also produced in considerable quantities, while rice is grown to a more limited extent. The country’s natural geographical conditions make livestock management a central feature of the agricultural sector. Unlike cereals, Tajikistan is largely self-sufficient with animal products. For many households, silkworm and beekeeping are also important sources of income.
At independence, agriculture was organized in state and collective agriculture. During the 1990s, this structure was loosened up and in 1998 a privatization of the agricultural sector began. The process has been slow, and in many cases the new private owners have been the same people who previously operated the state-owned units. Nor has privatization meant that the large group of farm workers have had the opportunity to acquire agricultural land.
Note: the capital city of Tajikistan is Dusjanbe with a population of 893,800 (with suburbs, UN estimate 2019). Other major cities include Chudzjand, Kulob, Bokhtar.
Minerals and energy
Abbreviated as TJK by abbreviationfinder.org, Tajikistan has long benefited from its significant assets on both precious metals, especially gold and silver, as well as industrially valuable minerals. Among the latter are tungsten, antimony, bismuth and mercury, as well as zinc, lead and tin.
Vattenel dominates the domestic production of energy, and the addition of the hydroelectric power plants Nurek and Rogun allows both local consumption and exports. The supply of uranium is considered significant, while small amounts of oil and natural gas are extracted and coal mining occurs on a limited scale. Fossil fuel imports are therefore of central importance to the country’s economy. The energy supply systems are poorly integrated, and especially the northwestern part of Tajikistan is cut off from domestic energy sources in other parts of the country.
Industrial operations in Tajikistan have long been dominated by a small number of large state-owned enterprises. In the main, the production consists of consumer goods, mainly food, but also tobacco, textiles and clothing and leather goods. Metallurgy and the heavy engineering industry increased in importance during the 1970s and 1980s, not least thanks to good access to electrical energy. In addition to refining and some processing of domestic mineral resources, there is one of the world’s largest aluminum smelters. Chemical and construction equipment industries are other sectors that expanded during the end of the Soviet period.
Aluminum and cotton are the most important export goods; the aluminum plant in Tursunzoda, west of Dushanbe, alone accounts for half of the export revenue. Imports are dominated by raw materials, mainly cereals and fossil fuels. In general, imports have increased faster than exports, which is why today Tajikistan has a growing trade deficit. The Russian Federation, Kazakhstan and Uzbekistan have long been Tajikistan’s most important trading partners, but in recent years trade with China and Turkey has grown in importance.